Monday, April 10, 2017

Ayala Group eyeing second offshore energy expansion

AC Energy Holdings,
Inc., the energy investment arm of the Ayala Group, is setting its sights on
Vietnam as the second regional expansion for its offshore investments.

In a lunch briefing
with reporters, AC Energy President and Chief Executive Officer Eric T. Francia
said there is no particular technology yet that they are looking at – whether
that would be hydro, gas or renewable energy (RE) development opportunities.

“We have started to
look around the Southeast Asian region and we hope to make our second regional
investment in about 12-18 months,” he indicated.

Francia emphasized that
they are “studying other market opportunities within the region,” qualifying
further that “it takes time to strengthen our presence in Indonesia beyond the
two assets by working with existing partners to pursue expansion and greenfield
projects.” He is referring to the recent geothermal acquisition from Chevron
Corporation and an ongoing greenfield wind farm development in Indonesia.

The company has 20
percent equity in the consortium that acquired the American firm’s geothermal
assets in Indonesia – which are of aggregate 637 megawatt (MW) capacity. The
other investment expansion the company will be pursuing is its joint venture
with Star Energy for 75MW Sidrap wind power project.

If there is any third
regional market that they would be looking at, Francia noted that it will be
Myanmar – given the synergy that they already have in that investment
jurisdiction for Manila Water Company.

The investment platform
that the Ayala group has been exploring would be a split portfolio of 1,000
megawatts for renewable energy and the balance for conventional energy
technologies, primarily coal plants.

AC Energy said it sets
“a net target of reaching 2,000 megawatts of attributable capacity by 2020, of
which 1,000 megawatts will be renewables.”

Currently, the company
has 1,300 megawatts capacity, including 300MW of renewables. Of the figure,
15-percent accounted for its overseas power capacity.

“AC Energy is now
transforming itself to become a regional energy platform with investment,
development, operations and retail capability,” Francia noted, adding that the
company “is at a critical inflection point. Our transformation is enabled by
rapid organic growth and key strategic acquisitions.”

With its growing
portfolio, the energy unit of the Ayala Group already contributed P2.7 billion
to its parent’s income base last year, inching up from P2.1 billion in 2015.

The recent acquisition
of the company had been Bronzeoak Clean Energy (BCE) and San Carlos Clean
Energy (SCCE) which underpins it planned portfolio growth in the RE space,
primarily in the solar sector.

Francia said “our newly
integrated development platform is a critical element that will help AC Energy
attain the goal of tripling its renewable energy capacity to 1,000MW by 2020.”